Is today’s social destruction really the best humanity can do?

Millions of homes stand empty at the same time millions of people are homeless. Factories around the world are operated under capacity or are shuttered at the same time that millions of people are without work. The very people who brought down the world economy through reckless speculation continue to dictate that austerity be imposed on everybody else to pay for their bailouts.

Why are we supposed to believe this system “works”?

Long-term destruction of the environment for the sake of short-term profits. Intentional waste in packaging and in other aspects of production, and planned obsolescence. Unemployment and the destruction of productive capacity as the price to be paid to restore private profits.

Is this really the best humanity can do?

“Business cycles” — the euphemism for the alternating booms and busts of capitalism — are not a natural force of nature, ebbing and flowing like the tides. Tides are readily explained by the gravitational forces of the Moon and the Sun. Regular booms and busts (a separate phenomenon from the current structural crisis of capitalism) are explained by social forces.

Social need vs. lack of planning

Because there is no mechanism to determine social need, products of all sorts are produced until there is a glut, causing prices to fall and capitalists to reduce production through mass layoffs and shutting down facilities — destroying productive capacity until shrinking inventories create shortages that again stimulate demand. Layered over this dynamic is the deprivation created by the accumulation of capital into fewer hands, itself a contributor to instability.

The economist John G. Gurley summed up this process:

“The process of exploitation leaves purchasing power in the hands of a proletariat that enables it to purchase only an inadequate portion of the total products just turned out. The large remainder of the output must be fashioned and purchased by capitalists as part of the accumulation process. There is a continual threat, therefore, of too heavy a burden being placed on capitalist accumulation, a ‘burden’ that stems from the exploitation of labor. …

‘Underconsumption’ does not indicate that during phases of rapid accumulation and prosperity [the ‘boom’ portion of the business cycle] wages are depressed. … [T]he opposite occurs. But, while workers in these exhilaration phases are thus entitled to raise their consumption levels somewhat [because of their increased wages], it is never enough to lighten significantly the ‘burden’ on the capitalist class, which is soon made intolerable by a falling rate of profit. Thus, accumulation slows down until the previously favorable conditions for capitalists have been restored; and this involves principally the destruction of capital values and the replenishment of the reserve army of labor.”*

Regardless of a capitalist’s personality, the capitalist must accelerate this process of exploitation under the rigors of market competition. If a capitalist does not maximize his or her profits, a competitor will and put the first capitalist out of business. Expand or die is the inescapable law of capitalism.

The financial industry adds to this pressure, acting as a whip in addition to its more recognized role of parasitism. A management that does not maximize profits (which in turn maximizes stock prices), including imposing layoffs and wage cuts, will swiftly find its stock price in a nosedive, leaving the company vulnerable to an unfriendly takeover by a speculator seeking to profit from the reduced value of the company.

A speculator who gains control in such a situation will change the management, or simply sell off the company in pieces when that seems more profitable. Moreover, companies with stock traded on exchanges are legally required to maximize profits for shareholders, above all other considerations.

The entire system acts to concentrate more and more money into fewer and fewer hands as industries are consolidated into a handful of major competitors and competitive pressures force ever more reductions to overhead, especially the cost of wages. Although he wrote in the earliest day of capitalism, even Adam Smith acknowledged its inherent inequality in a passage in which he discusses the expense of a judiciary to adjudicate disputes:

“For one very rich man there must be at least five hundred poor, and the affluence of the few supposes the indigence of the many. The affluence of the rich excites the indignation of the poor, who are often both driven by want, and prompted by envy, to invade his possessions.”**

Accumulation vs. environment

What Smith, or even Karl Marx a century later, could not have foreseen is environmental destruction so severe that the fate of humanity, and the planet, is at stake.

Corporations privatize the profits, but socialize environmental costs — they do not pay for pollution to the air or water; toxic waste left behind after production is moved elsewhere is usually cleaned up, if it all, at government cost. Thus the polluting corporation need not shoulder these “external” costs. Taxpayers are subsidizing corporate environmental destruction in addition to shouldering the cost to their health.

In the absence of planning, each corporation makes its individual decisions, so the costs of environmental destruction — in terms of pollution, disposal of toxic wastes and emission of greenhouse gases — add up without accountability. And as production is moved around the world, the environmental costs of rapid industrialization are repeated in new locations. The ability of capital to move at will induces governments to not ask for accountability, giving more license to polluters.

The race to the bottom not only encompasses lower wages and harsher working conditions, it means environmental destruction. At the same time, technological innovation is seen as the answer to its own problem; a falsity caused not only by a fetish for technology but because it does not require an analysis of the system behind all this.

John Bellamy Foster and Brett Clark, in the latest of a series of articles in Monthly Review sounding the alarm bells on the looming environmental catastrophe, wrote:

“Capitalism’s inability to engage in social and economic planning is reflected in decades of failed environmental policy. Although there have been some relatively minor environmental improvements, all attempts at comprehensive planning and action of the kind needed to avert what the scientific community is pointing to as a sure path of destruction have been systematically repulsed by the system. Instead technological change is invoked as a deus ex machina, allowing us to proceed along the current path of production, distribution, and consumption.”***

Permanent expansion vs. a finite world

A system built on continual expansion reaches a crisis when it can no longer expand. When almost all corners of the world are incorporated into the capitalist world market, there is no route to continued profitability for capitalists other than imposing wage cuts through increased threat of unemployment and the entire program of austerity. More machinery can be introduced, but as more capital-intensive machines lead to progressively smaller increments of overhead reduction, the competitive pressures to reduce costs will soon enough target wages and benefits.

The imposition of austerity around the world is not due to a mysterious inability to grasp the human costs or an inexplicable clinging to an ideology — it is the natural progression of capitalism, in which “markets” determine social outcomes. “Markets” are the aggregate interests of the most powerful industrialists and financiers.

As living standards continue to deteriorate, and even less production will be able to be sold because working people don’t have the money to buy, a vicious circle spirals downward. As profits come under more pressure, more austerity will be the only answer — it is the only answer capitalists can give under the logic of their system.

A new year is here. Once and for all, we need to rid ourselves of the idea that if only we explain the problems to political leaders who advance the interests of industrialists and financiers they would come to understand and turn against those interests. Capitalists aren’t going to change because it isn’t in their interest to do so, nor will they tolerate change to a system they dominate.

Linking hands and building a global social movement to create a better world is what will bring change.

* John G. Gurley, “Marx and the Critique of Capitalism,” anthologized in Randy Albelda, Christopher Gunn and William Waller (eds.), Alternatives to Economic Orthodoxy, pages 292-293 [M.E. Sharpe, 1987]
** Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, book V, chapter 1, part 2
*** John Bellamy Foster & Brett Clark, “Planetary Emergency,” Monthly Review, December 2012, page 8

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5 comments on “Is today’s social destruction really the best humanity can do?

  1. So true. Hasta la Victoria Siempre! A happy New Year!

  2. archangelmichael2 says:

    The sad thing is so many laws have been passed that makes it prohibitive to own a medium to large business without becoming a giant Corp overseas which uses the cheapest quality materials for products.

    No President since the 70s have done anything and the Liberals make things even worse as they want everybody to live off of handouts from the government instead of finding a skill they can employ.

    Up thru the 60s you could earn a modest wage without going thru a long rigamaru in Collage.

    You could go to night school and learn a trade like how to make shoes or how to fix clocks and be useful to society.

    The other problems is the big corportations have made electronics so they cannot be taken apart so if something goes wrong the WHOLE FUCKING UNIT has to be taken back instead of just replacing the lose spring or coil that will get the job done.

    Cars are that way too where up till the 90s just about anybody could be their own mechanic if they really wanted to fixing their own cars and now if something goes wrong you have to take the entire engine in which means you don’t have a car for a long time where before if you took car mechanics class you could fix the problem yourself in you’re own garage. If not you could take the car down to Joe’s Garage and he’ll do it.

    Now cars are designed so even Joe can’t look into it which the car engine has to be looked at by a professional of the company you bought the car from like Toyota or Honda.

  3. archangelmichael2 says:

    Socialism doesn’t work because while it makes everybody equal they are equally poor. China is doing good now because of loosening business laws that allows limited ownership wheere before only the government told you what you were allowed to do or be after completing school

    What’s weird is as soon as I started typing about China the text suddenly got slowed down and it’s doing it again. It’s almost as if I am being watched on what I am typing.

    Government quit spying and go play with you’re kids that need you! Can’t you hear them crying for Daddy’s attention? Be a good parent instead.

    • I’ll confine myself to a brief response, because there is so much in your two comments that defies reality. “Socialism” hasn’t done anything because it hasn’t been tried yet. The Soviet bloc could call itself “socialist” if it wished, but giving yourself a title doesn’t make it so.

      That is far too long a story to put into a comment (which is why I had to write a book on the topic), but suffice to say that those were countries that become frozen attempting a transition out of capitalism, took wrong turns due to a long series of historical reasons, through shallow and inadequate understandings of those they purported to follow, and because they were under continual attack from the capitalist world.

      The term “state capitalist” is frequently used to describe those regimes, and while I personally have strong issues with that term, used in a precise way it can be a useful short-hand because capital still was dominant. In these cases, party, government and enterprise leaders made all the decisions, and the workers were expected to follow orders. Just the same as in capitalism, only in capitalism a private elite owns the capital and is thus entitled to make all the decisions while the rest of us are expected to shut up and follow orders.

      Socialism is where there is a full democracy, in which everybody is entitled to participate in all decision-making, enterprises are embedded in their community, distribution is rational so that everybody has the basic necessities of life, and production is geared toward human need rather than private profit. Without economic democracy, there is no such thing as political democracy. Thus, democracy in a capitalist state is an illusion, and socialism has not yet existed. As Rosa Luxemburg said a century ago, it’s “socialism or barbarism.” You obviously prefer barbarism. I’ll take socialism.

      And as to your comments on consumer items becoming more complicated, that is simply planned obsolescence — a feature unique to capitalism. Things don’t work, break down quicker and are too complicated to fix so that we are forced to buy more stuff. That is capitalism in action, and another example of production for private profit instead of rational human need.

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